The purpose of this study was to analyze the effects
of foreign assistance on less—developed countries’
agricultural productivity. The study employed a Cobb-
Douglas production function model. Several alternative
model specifications were utilized in an attempt to model
the true relationship between agricultural inputs and
output. First, the foreign aid variable was included as a
distributed lag of past foreign aid receipts and then as a
three years moving average of aid expenditures. Second,
dummy variables were introduced to allow the effects of
aid to differ by income levels, yearly factors, and
geographical regions. An inter country pooled cross section
and time-series data for a set of 59 countries
was used in the models from 1975-1984.

The empirical results did not support the hypothesis
that the aggregate effect of foreign aid on agricultural
production ls positive. However, the results of the model
including dummy variables which account for the regional
differences of aid effects revealed that the contributions
of aid differ by geographical regions.